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KKR to buy out Axel Springer minority shareholders at 40% premium

KKR, Axel Springer

Axel Springer CEO Mathias Döpfner said “It’s a partnership of equals”

US private equity investment firm Kohlberg Kravis Roberts (KKR) announced a deal with Axel Springer, offering a 40 percent premium to buy out minority investors, media reports said.

CEO Mathias Döpfner over a conference call told reporters, “It’s a partnership of equals.” The buyout offer puts an equity value of €6.8 billion on the business, with €63 per share.

Partner at KKR Philipp Freise, said, “In light of the fast pace of change in the media sector, Axel Springer now needs continued organic investments and successful execution of its strategy.” According to media reports, KKR has pledged to remain invested for a minimum of five years. KKR would support Springer’s efforts in a ‘long-term and sustainable manner’, Freise said.

CEO of Axel Springer Mathias Döpfner and Philipp Freise control 45.5 percent of Axel Springer.  That said, Axel’s grandchildren Axel Sven and Ariane who hold 9.8 percent are not part of the KKR deal. In future, they might decide to sell or reduce their holdings, Döpfner said. “Our growth plans will require significant investment in people, products, technology and brands over the next few years.”

The remaining 44.8 percent of shares are in free float. These shares are worth €3 billion at the tender price, media reports said.

The strategic partnership with KKR might create new opportunities for organic investments and acquisitions, he added. KKR is not initiating any merger talks and is currency searching for more opportunities.

Media reports said that Springer shares jumped 12 percent to trade at the buyout price.

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